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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22621
Experience:  38 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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I have a $12,000 legal aid debt which has now been transferred

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I have a $12,000 legal aid debt which has now been transferred to a debt collection agency and I have 7 days to pay. The original legal aid debt was over $24,000 accrued from a family court dispute with my ex-partner over the custody for the protection of our children due to her mental health condition. This was taken into consideration in reducing the debt amount along with my ability to repay is substantially effected as I pay child support for a son from an older relationship. My ex-partner doesn't have to repay any legal aid debt as she was a sickness beneficiary at the time. I have a part ownership in a house which is under a family trust. I couldn't get approval from other trustee to attach the debt to the property, hence why the debt has gone to a debt collection agency. What are my options, since i'm already paying over 60% over my earnings in mortgage & child support payments and don't have any leeway in repaying the legal aid debt. I've considered filing for 'No Asset Procedure' but not sure if my part of the trust ownership in the property will disqualify me from applying for 'NAP' and if the debt is excluded from being written off as it could be considered as a government enforceable loan?

Chris The Lawyer :

Hi and welcome. My first response will follow shortly. Please feel free to follow up if anything is not clear.

Chris The Lawyer :

The NAP procedure may be difficult because of the other debts (which would not be written off). But debt collection agencies dont have any special powers. All that can be done is to get a judgment and then try to enforce this. If this went to Collections they would only order you to pay what you can afford which might be as low as $10 per week.

Customer:

My worry with this is that the agency will add up to 30% then add court costs. Should I ring the debt agency direct and advise that I want to take the above option of court enforcement?

Chris The Lawyer : The debt collection agency has no power or authority to add 30%. That is just them trying to bully you. If you are sued you will have to pay court costs however. I suggest you contact Legal Services direct and explain your present limited ability to pay, and suggest you start at a modest amount like $5 or $10 per week, and seeif they accept this.
Customer:

I've tried to negotiate with Legal Aid regarding the caveat on the property, but they said that they can no longer negotiate and that I have to deal with RNG debt agency direct.

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